Tag: franchising

FLAWED STRATEGIC THINKING THAT DRIVES SERIOUS FRANCHISE LEADS TO DISQUALIFY YOU

Posted on by Franchise Strategist

Flawed Strategic Thinking That Drives Serious Franchise Leads to Disqualify You

By Paul Keiser
I Show Franchise Business Developers and Brokers How to Automatically Find Serious Leads

The leading reason we’ve found causing serious leads to disqualify brands and brokers from consideration is a lack of strategic thought, time and attention given to 21st Century aspects of franchise business development. As an industry, franchise business development methods are mired in tactics over 25-years old. It takes serious reflection and change to adapt to emerging 21st Century franchise buyer behavior and their very different expectations.

Here are five inter-related company cultural and strategic issues that, if ignored, cause serious leads to disqualify you from consideration.

Recognize Franchise Business Development is a Business within a Business
As they begin to scale, franchisors and brokers often struggle with business development. That’s because the knowledge and experience to do it well aren’t part of the operations or customer excellence skill sets of many owners and investors.

Franchise business development is actually a business within the larger franchise business with different needs. Recognizing this, and then properly staffing, funding and executing around a set of realistic goals can put you on a sustainable pathway to success.

Unfortunately, too many try to fix a faltering franchise business development program with band-aids; neglecting the thought needed to find the root causes of problems, not just surface symptoms.

Why…because it’s easy. Tactical solutions make everyone feel good. In fact, re-imagining a 21st Century version of franchise business development requires digging deeper.

To meet the challenge, three strategic areas critical to franchise business development must harmonize:

Storytelling
Finding and Nurturing Serious Leads
Intelligent Pipeline Management
Think of each of these areas as a leg of a stool. If the legs aren’t aligned, then the stool teeters and totters making it useless.

Do nothing and watch as serious leads disqualify you.

Inertia Kills Brands and Brokers
Many brands and brokers become paralyzed by the breadth and depth of change needed to adapt to the changing macro environment of franchise business development. The smaller the brand or broker the more daunting the challenges.

Smaller brands and brokers aren’t often blessed with tens of thousands of dollars laying around to “experiment” or try something new; so, fear stifles decision-making.

But time kills deals. Time also kills brands and brokers unwilling to adapt. It’s time to step up and either hire or develop the skills to upgrade franchise business development methodologies. The market isn’t waiting. Brands and brokers that grab an early mover advantage will prosper; while laggards will fall by the wayside.

Do nothing and watch serious leads disqualify you

Lack of Expertise
The skill sets needed to address both franchise business development technology and people’s evolving behavior doesn’t necessarily reside in most franchisors and brokers, who are often solo practitioners. Many franchisors have consumer marketing pros or agencies supporting franchisees. However, these same highly-talented people are inexperienced in the “black arts” of franchise business development and the psychological journey a serious lead embarks on in the Internet Age. You hired them to drive traffic into your stores and restaurants; not recruit franchisees. And likely they do a very good job for you.

Giving franchise business development insufficient support or forcing business developers to work with meager lead generation budgets or whatever software is around or cheap is commonplace. That’s a lazy approach and speaks to a lack of understanding of how to successfully grow a franchise business development powerhouse.

Ownership and leadership need to step up and either acquire or outsource the knowledge needed to reliably scale the business.

Do nothing and watch serious leads disqualify you.

The Internet Upends Traditional Notions of Franchisee Recruitment
Every generation from 1995 forward has been reshaped by the Internet. Consumers complete almost 75% of brand research for high-end goods and services on the web before making a call or a visit. They expect transparency. Your storytelling needs to meet a higher standard of excellence or these serious leads will just move on. So, ask yourself, do you tease or hide information or do you educate on your franchise business development website?

Text messaging has rapidly changed the franchise business development communication landscape. Today’s serious leads comfortably text back and forth with your business developer before engaging. What does that do to old-fashioned “dialing for dollars” models? Which leads are more engaged and serious?

Your franchise website is now expected to tell your whole story. It’s not just a brochure anymore or a landing page to get a form filled out. You’re forced to dig deeper to articulate your competitive differentiation. A test: if you can put your name on a competitor’s website, then something’s wrong with your story.

All brands are coming to grips with ever rising lead generation costs. Can we harness the vast potential of social media and online advertising to create affordable serious leads prospect? Can these newer channels become a game changer or are they just one more money drain? How do these leads convert into your pipeline compared to other channels?

Do nothing and watch serious leads disqualify you.

Leads Now Have the Power

Leads now control the research process. In fact, 75% of their research is already done before first contact. Serious leads expect complete and transparent information about brands. So, a solid story and a dedicated franchise business development online presence are now table stakes with serious leads. These serious leads engage when they’re ready; not before. So encourage them to do that by delivering a brand education experience that gets them emotionally and rationally invested in your franchise opportunity.

Do nothing and watch serious leads disqualify you.

Franchise Pipeline Solutions (FPS) helps new and emerging franchise brands find their most serious leads using an integrated pipeline management system. It combines enterprise-class CRM with multi-channel Marketing Automation, 1:1 and bulk text messaging, behavioral scoring and auto call scheduling. Our proven approach has been in worldwide use for over eight years.

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About the Author:
Paul Keiser has over 40 years of experience franchise development, social media and online lead generation, email nurture, marketing automation and brand storytelling. Today he makes his living giving precious time back to franchise brand business developers and franchise brokers by helping them find serious leads so they focus on more of the right people and do more deals.

FRANCHISORS AND FRANCHISEES MUST LEARN TO DEAL WITH CHANGE

Posted on by Franchise Strategist

Franchisors and Franchisees Must Learn to Deal with Change

By Ed Teixeira

FRANCHISING,
Ed Teixeira is Chief Operating Officer of Franchise Grade and was the founder and President of FranchiseKnowHow, L.L.C. a franchise consulting firm.

If there is one thing that the Pandemic taught us, especially those in the franchise industry, is that certain events both large and small require change. It is a given that the recent Pandemic represents extraordinary change having last occurred 100 years ago. Franchise brands face frequent challenges requiring change including, a formidable new competitor, franchisee resistance to certain promotional programs, declining franchise system growth or a public relations problem like when the Subway Foot Long Sub, was found by a customer to be less than a foot long. When these situations arise, franchisors and franchisees must be equipped to implement change to meet the challenge.

Expect that franchisors will be required to implement changes to their franchise program from time to time some minor and some major. When a franchisor wants to make a change, based upon the magnitude of the change, it should be communicated to the franchisees before the change is implemented providing advance notice.

* Using the franchise advisory council as a sounding board

* Giving franchisees the courtesy of knowing about the change

* Providing the franchisee community an opportunity to respond

* Enlist select franchisees to help mold the change and avoid a confrontation

Some changes are routine in nature and can be implemented as per an existing policy. For example, a revision or clarification to a procedure in the franchise operations manual. Major changes that may have a direct impact on franchisees demand special attention. In certain cases, the change may not be that significant, but rather the perception by franchisees is that the change is the beginning of “more to come.”

Examples of Important Changes Include:

1.Changes to franchise agreements that significantly revamp contract terms, including renewal terms, royalty fees and default conditions. These changes may cause particular concern among franchisees that will be looking to renew their franchise agreement.

2. Changes in marketing or advertising programs which would represent a major departure from the current program.

3. Changes in the direction of the franchise strategy that involve applying resources to a new venture or business.

One of the most effective methods to establish and implement a major change is to involve the Franchise Advisory Council or marketing committee which includes franchisee and company representatives. These committees allow for a dialogue between the franchisor and representative franchisees which can help to foster positive franchise relations and establish a buy-in from existing franchisees.

When franchisors implement a major change that lacks franchisee involvement or advance notice it can be a recipe for trouble. To maintain positive franchise relations before implementing an important change the franchisor should gauge how the change could affect franchisees by obtaining feedback from franchisor field staff and select franchisees.

If feedback indicates a strong resistance to the change, the franchisor should consider the situation, and avoid unnecessary confrontations by being flexible. Change is an important aspect of all relationships especially in the world of franchising. It is important that the franchisor and franchisees conduct business within a climate of change that is positive and considers the needs and objectives of both parties.
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About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].
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FRANCHISE YOUR BUSINESS: www.franchisegrowthsolutions.com

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DO YOU NEED A TAX ID? HOW TO OBTAIN AN EIN

Posted on by Franchise Strategist

After four years of life in the outlaw motorcycle subculture in NYC, Tom got a haircut, took a shower and landed a respectable job in the New York Subway system. After more than 13 years in the subway Tom became frustrated with the bureaucracy and politics.

DO YOU NEED A TAX ID? HOW TO OBTAIN AN EIN
By TOM SCARDA, CFE Founder of FRANCHISE ACADEMY
🔑Education 🔑 insight 🔑 inspiration – Have you been working from home and don’t want to go back to your office? Have you tasted freedom and want out of the corporate rat race? We should talk. No Sales, No Kidding.

After you incorporate or form an LLC, the IRS will issue a federal tax ID to your small business. This tax ID is also known as an employer identification number, or EIN.

What is an EIN? Let’s take a closer look at this federal tax ID, key areas where having an EIN may benefit your business, and how to obtain an EIN if you were not already issued this tax ID.

What’s an EIN?

An EIN is essentially a social security number (SSN) for a small business.

This tax ID is nine digits long, similar to that of an SSN, with a primary purpose of legally identifying your business. Entrepreneurs may use their SSN or an EIN on paperwork pertaining to their company. Some entity formations, like sole proprietors, use their SSN for business tax purposes. Incorporated formations, like limited liability companies (LLCs), have the choice to use their SSN or an EIN.

More often than not, incorporated businesses will use their EIN. This is because an EIN is slightly less sensitive than an SSN. As such, business owners may choose to use an EIN in lieu of an SSN. Choosing this tax ID acts as a safeguard to ensure the safety of their personal identity. It also helps to keep entrepreneurs in compliance with U.S. tax laws.

How Do I Know I Need an EIN?

There are several aspects of small business where it’s necessary to file for an EIN. Here’s where this tax ID can benefit your company.

Opening a business bank account. Having a business bank account allows small business owners to keep their personal and professional finances separate. Most U.S. financial institutions require a certified copy of an EIN prior to opening a business bank account. An EIN also makes it easier to establish a business credit profile, separate from the owner, and build business credit.
Forming an LLC. If you have already formed an LLC, then you were issued an EIN — and may skip ahead in reading. However, if you are planning to form an LLC keep in mind that the IRS will issue you an EIN. You will also need to obtain an EIN if you choose to incorporate as another entity formation, such as incorporating as a corporation or forming a partnership.
Hiring employees. Here’s where an EIN benefits both employees and the business owner. If your business plans to hire employees, it is a requirement to obtain an EIN. This allows the IRS to track your business and ensure it collects payroll tax. On the flip side of the coin, once a business has been incorporated the business owner is technically considered an employee. As such, you will need to obtain this tax ID — for future employees within the business as well as your own status within an incorporated business.
Besides the aforementioned three bullet points, EINs may benefit businesses in even more ways. You will need to obtain an EIN to establish pension, profit sharing, and retirement plans. This tax ID may also be used when filing annual tax returns. In the event you decide to change your organization type, filing Form 8832 Entity Classification Election will ensure your entity is able to retain its EIN, even if its legal structure has changed.

How Can I Obtain an EIN?

Obtaining an EIN is a fairly straightforward process. You can apply for an EIN online, through the mail, by fax, or even over the telephone with the help of MyCorporation’s trusted team of professionals.

Before you begin the filing process, however, please note that you must determine if your business is eligible for an EIN. The principal business must be located in the United States or its U.S. territories. The true principal officer or general partner must also possess a valid tax ID. This may be an SSN, an EIN, or an individual taxpayer identification number (ITIN). Finally, if your small business is not already incorporated or formed as an LLC then it must file to incorporate as a legal formation for their organization.

The Value of Having an EIN

Having a tax ID allows you to take your business to new, exciting heights while remaining in compliance with tax laws. As an added bonus, once you obtain an EIN you have it forever because EINs do not expire.

Conduct your due diligence prior to filing for an EIN and reach out to a legal professional prior to filing if you have any questions. Once you obtain your EIN, remember to treat it similar to that of an SSN. Keep this ID in a safe place to protect it and use it in areas required by your business.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.

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About Tom Scarda:
Tom is now a nationally recognized small business and Certified Franchise Expert (CFE), motivator and dynamic speaker. Tom has authored three books: Franchise Savvy, The Road to Franchise Freedom and The Magic of Choosing Uncertainty: How to Manage Change, Embrace Fear and Live a Fulfilled Life.

30 years ago, searching for his inner drive, Tom left college and submerged himself in the motorcycle underworld in lower Manhattan. This made his mother worry. It was the first time Tom chose uncertainty over the status quo.

After four years of life in the outlaw motorcycle subculture in NYC, Tom got a haircut, took a shower and landed a respectable job in the New York Subway system. After more than 13 years in the subway Tom became frustrated with the bureaucracy and politics. So he quit his job and left his pension behind to pursue his dreams of business ownership. This also made his mother worry.

In 2000, he purchased a smoothie franchise, which he built into three units and sold five years later for a considerable profit. He was the #1 franchisee of the year in Maui Wowi Smoothies in 2002. He purchased a second franchise in 2006 called Super Suppers and failed miserably in that franchise concept. The lessons he learned from failure is what makes him such an expert. Tom has owned and operated both franchised and non-franchised businesses and has years of knowledge and wisdom to share with you.

WHO BUYS A FRANCHISE?

Posted on by Franchise Strategist

The phrase, ‘work on your business not in it,’ is the central tenet of franchising and successful business ownership, even outside of franchising. As you look at franchising, you’ll realize that the barrier to entry is low in many cases. However, the barrier to scalability is very high.

WHO BUYS A FRANCHISE?
By TOM SCARDA, CFE (Posted with permission)

A very high percentage of people who choose to invest in a franchise usually do it as a second, third or fourth career. Most franchise owners are corporate refugees who have escaped their cubical and the blight of corporate America to control their destiny and grab their piece of the American dream. 
Many people also invest in a franchise as an investment vehicle and a way to diversify their investments and gain a tax shelter. Some franchises allow for keeping a full-time job as the franchise owner builds their franchise. These types of franchises are called manager-run franchises. A word to the wise, many companies will tell you that they can be run absentee or have a manager in place. However, they may be just trying to sell you a franchise. Ask for the percentage of franchise owners who are currently operating in that manner. Then ask for an email introduction to each one or at least a list of those owners so you can call them and validate that the operation works without them being there.

In addition, you don’t have to have experience in the industry of the operation you buy into. As a matter of fact, many times, the franchisor prefers if you have no experience or exposure to the industry. If you do, you will likely bring baggage and bad habits to your operation. An excellent franchise company will train you in best practices for their industry.
As an example, if you have a barber or beautician’s license, you may not be granted a franchise in a hair cutting concept. See, the franchise knows that if you can act in the worker’s role or be the technician, you’ll slowly slide into that position and not be the CEO or CFO of your franchise. Once that happens, you plateau in the business, revenues become flat, and you have essentially bought yourself a job.  

Many people come to me and say, “I’m an accountant, I want to open an HR Block, or I love to bake, so I want to open a Nothin’ Bunt Cakes. Interestingly, Nothing Bunt Cakes want managers and leaders who can translate their corporate experience into building a significant franchise operation. They will then hire great bakers to do the daily grind. They do not want folks who like to bake. 
Work on the business, not in the business

The phrase, ‘work on your business not in it,’ is the central tenet of franchising and successful business ownership, even outside of franchising. As you look at franchising, you’ll realize that the barrier to entry is low in many cases. However, the barrier to scalability is very high. Many non-franchised business owners own a store and make it happen every day. Many times, that owner is frazzled because they are good at a specific task in an operation. Whether it’s managing people, sales, marketing, or specific duties such as being the baker or the auto mechanic. It’s rare that any one person is good or can have the time in a day to be good at everything. 

My advice is to drop employee mentality and start thinking like a business owner. Usually, an employee is focused on one or a few items within a business, and that is what they are paid for.
If you become a business owner, you are the Capitan of the ship, and you have deck hands running the operation of the boat. 

Like the Capitan of a ship, a business owner focuses on the big picture and directs that ship toward the intended port or its goals in the case of business. The owner should have a leadership mentality and be or get comfortable delegating. 

It’s said that the most valuable commodity to a human is time, and you can buy time. However, in a well-run business, you can buy time. You are leveraging other people’s time, thereby giving you time to do other things. Some of your time could be geared toward building the business by marketing or networking. Or having a staff ultimately gives you time for your family, extended vacations, or just enjoying your hobbies and passions. With a properly run business, you can really by time. I call that success. 
#FranchiseOpportunities #controlyourdestiny #changeyourlifetoday

About TOM SCARDA, CFE
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Tom failed in a franchise. That is why you need to talk with him. Easily avoid the mistakes he made.

Tom is now a nationally recognized small business and Certified Franchise Expert (CFE), motivator and dynamic speaker. Tom has authored three books: Franchise Savvy, The Road to Franchise Freedom and The Magic of Choosing Uncertainty: How to Manage Change, Embrace Fear and Live a Fulfilled Life.

30 years ago, searching for his inner drive, Tom left college and submerged himself in the motorcycle underworld in lower Manhattan. This made his mother worry. It was the first time Tom chose uncertainty over the status quo.

After four years of life in the outlaw motorcycle subculture in NYC, Tom got a haircut, took a shower and landed a respectable job in the New York Subway system. After more than 13 years in the subway Tom became frustrated with the bureaucracy and politics. So he quit his job and left his pension behind to pursue his dreams of business ownership. This also made his mother worry.

In 2000, he purchased a smoothie franchise, which he built into three units and sold five years later for a considerable profit. He was the #1 franchisee of the year in Maui Wowi Smoothies in 2002. He purchased a second franchise in 2006 called Super Suppers and failed miserably in that franchise concept. The lessons he learned from failure is what makes him such an expert. Tom has owned and operated both franchised and non-franchised businesses and has years of knowledge and wisdom to share with you.

After selling his smoothie operation and closing down Super Suppers, Tom started helping people figure out if franchising is for them and not make the mistakes he made. Tom previously hosted “The Franchise Hour” radio show in New York City. He currently Hosts two Podcasts and has been featured in dozens of magazines and newspapers and is a sought-after radio and TV guest. His mom has stopped worrying.

Born and raised in Brooklyn, NY, Tom was named one of the top 50 business leaders on Long Island by Long Island Business News. Tom lives on Long Island, NY with his wife of 32 years, Gina, Darla the BernaDoodle and a few chickens. He is the proud father of two grown children and a new Grandfather. He enjoys flying airplanes in his spare time and still appreciates old school Harley-Davidson choppers and tattoos. (OK, mom still worries a little).

Tom’s mantra is “There are no wrong turns, just different experiences.” However, some folks just move in circles. Tom believes that everyone has a passion sleeping within his or her soul. Tom’s mission is to help people harvest their own passion for the betterment of the world. He inspires people to surf on the edge of their comfort zone and choose uncertainty over unhappiness.

It’s said that the most valuable commodity to a human is time, and you can buy time. However, in a well-run business, you can buy time. You are leveraging other people’s time, thereby giving you time to do other things. Some of your time could be geared toward building the business by marketing or networking. Or having a staff ultimately gives you time for your family, extended vacations, or just enjoying your hobbies and passions. With a properly run business, you can really by time. I call that success. 

🔑Education 🔑 insight 🔑 inspiration – Have you been working from home and don’t want to go back to your office? Have you tasted freedom and want out of the corporate rat race? We should talk. No Sales, No Kidding.

Cabin Fever Will Drive a Franchise Explosion

Posted on by Franchise Strategist

There are available franchise opportunities that can satisfy a wide range of prospective franchisees. From fast food concepts to children’s services there are franchises that require an affordable investment that can meet an increase in customer demand.

Cabin Fever Will Drive a Franchise Explosion

FRANCHISING,
Ed Teixeira is Chief Operating Officer of Franchise Grade and was the founder and President of FranchiseKnowHow, L.L.C. a franchise consulting firm.


By Ed Teixeira. VP Franchise Grade, Author, MA Economics, Industry Partner Stony Brook U.,Advisory Board Pace U. Lubin School

The havoc caused by the Pandemic has given a new meaning to the term cabin fever which is typically attributed to a bad winter. Instead, this recent case of cabin fever has lasted throughout the spring, summer and winter. As the disruption caused by the Pandemic begins to subside with more of us getting vaccinated people are looking to break out from being stuck at home.

Whether its recently overcrowded restaurants, golf courses or a surge in vacation rentals, people want to get out. This movement has started to translate into an increased focus on franchise opportunities. Every credible franchise forecast predicts a very active 2021 for the franchise industry. If there is one thing the franchise model proved during the Pandemic is its resilience to withstand it’s negative impact that caused so many independently owned small and medium businesses to close.

There are available franchise opportunities that can satisfy a wide range of prospective franchisees. From fast food concepts to children’s services there are franchises that require an affordable investment that can meet an increase in customer demand.

Consider the disruption in children’s lives by their not being able to attend school or participate in recreational actives. Parents of school age children will want to make up for these losses by utilizing the various services provided by children’s franchise brands from tutoring to creative arts to recreational programs.

A good resource is, https://www.franchisegrade.com/search which presents over 2,500 franchise opportunities that prospective franchisees can view at no cost. Visitors can use filters to find the type of franchise they prefer, the amount of investment and compare various franchise opportunities.

Now is the time to shake off that cabin fever and take that next step by finding that franchise opportunity that fulfills your vision and meets your budget.

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ABOUT THE AUTHOR:
Currently the VP of Franchise Development for Franchise Grade.com. Ed has over 35 years in the franchise industry as a franchise executive and franchisee. He has an MA in Economics from Northeastern U. Mr.Teixeira franchise experience has included the retail, manufacturing, home health care, medical staffing and GPS fleet tracking industries. Ed has experience with international licensing in Asia, Europe, and South America and was a contributor to Forbes Magazine and is qualified by the International Center for Dispute Resolution as an international franchise expert. He is also a faculty member of LawLine.com and have Lecturer at Stony Brook University Business School on the subject of Franchising. Contact Ed at: [email protected]. Visit his website: www.franchisegrade.com

What is a Master Franchise and Sub-Franchise and How Are They Different Than An Area Development?

Posted on by Franchise Strategist

A master franchise is distinguished from an area development agreement in which a person or entity who buys a territory or region is required to develop that region directly. The area developer would be trained and supported by the franchisor and required to open a certain amount of locations within a certain territory and in a certain time frame.

What is a Master Franchise and Sub-Franchise and How Are They Different Than An Area Development?
Reposted with permission from Spadea Lignana – Franchise Attorneys

 What is a Master Franchise and Sub-Franchise and How Are They Different Than An Area Development?
Like most business disciplines, franchising has its own jargon or vocabulary. The terms “master franchise” or “sub-franchise” and “area developer” have specific technical definitions, but are often used improperly. This article will help to define a master franchise or sub-franchise and area developer and distinguish them from other forms of expanding a franchise system.
Franchise systems sell a master franchise (also known as a “sub-franchise”) in order to more rapidly expand their brand and system. Master franchising is typically the most common way brands expand internationally. In that context, a master franchise or sub-franchise may be sold to a person or entity to sell franchises on the franchisor’s behalf in another country. The master franchisee has the responsibility of recruiting, training and supporting franchisees throughout that country acting as their franchisor. This makes sense for the franchise system that is interested in expanding globally to capture local knowledge, relationships and the logistical advantages of being in country.

Understanding a Master Franchise
In the United States, many systems have used master franchising to grow domestically by carving the country into regions that may be individual states or groups of states, or even parts of largely populated states, like California. There is no formal rule on the breakdown of the geography. For example, a system may sell a master franchise for Northern California. That master franchisee would be responsible for selling, training and supporting the franchisees in Northern California and would typically receive a percentage of any franchise fees and royalties paid under the franchise agreement by the franchisees.

The Advantages & Disadvantages
The advantages to this method of expansion are quicker growth, local knowledge and potentially better logistical support for the franchisees. The disadvantages to this method are both the division of future cash flow to the franchisor (which will affect their overall enterprise value) and the potential of weakening brand standards, which would be upheld and enforced by multiple master franchisees instead of the single franchisor. Unless tightly controlled and monitored, this has the potential of fragmenting the brand. There are also additional administrative and legal costs in being a master franchise system, such as a separate Franchise Disclosure Document (FDD) for the master offering and the individual offering, and the master may also need their own FDD for their franchisees. This is an area where franchisors and franchisees should consult with an experienced franchise attorney to ensure the legal documents are compliant with both federal and state law.

What’s the Difference Between a Master Franchise & An Area Development Agreement?
A master franchise is distinguished from an area development agreement in which a person or entity who buys a territory or region is required to develop that region directly. The area developer would be trained and supported by the franchisor and required to open a certain amount of locations within a certain territory and in a certain time frame. Panera Bread® is an example of a franchise that has expanded through area development. Historically they sold a minimum territory of 15 units and that owner must develop those stores within five or six years.

Becoming an area developer for a territory is another means of rapid expansion and has its own concerns for both the franchisees and the franchisor. There is no perfect method of expansion, only options that should correspond with the business goals of the owner. Each method has advantages and disadvantages. If you are considering master franchising or area development as a means to grow your system or you are considering becoming a master franchisee or area developer, we would be happy to have a discussion to see how we may be able help. We have drafting, reviewed and negotiated these documents both internationally and domestically for many clients on both sides of the transaction. We look forward to talking with you.

About the Author:

Tom Spadea spent more than 15 years in corporate and entrepreneurial positions before completing law school at Temple University’s Beasley School of Law. His undergraduate degree is in finance from Marquette University, where he graduated Cum Laude. Tom is a Certified Franchise Executive (CFE), a non-legal designation earned from the International Franchise Association. He has also been named a “Legal Eagle” by Franchise Times, a distinguished award recognizing Tom as a leader among his peers in franchising.

Tom is the founding member of the Philadelphia Franchise Association and is the current President and Chairman. The Philadelphia Franchise Association holds quarterly networking and educational meetings, bringing together franchisors, franchisees, and suppliers.

Focus:
Tom has been lead counsel for dozens of new franchise launches and has assisted franchisors and franchisees alike with a variety of legal issues, including private equity transactions, litigation, trademarks, partnerships, and real estate deals.
Background:
Tom’s entrepreneurial background goes back to the 1990’s when he was the co-owner and President of a communications equipment manufacturer where he co-founded a factory in Latin America, successfully created an international sales network in Asia and invented a product for which he was granted a US Patent.
Tom’s next move was into the franchising world working as a Franchise and Business Broker for Sunbelt of Philadelphia. He acted as an adviser to clients looking to transition into the ownership of a franchise or the purchase or sale of an existing small business. As a business intermediary, Tom handled dozens of transactions every year, ranging from listing businesses for sale to recruiting buyers. His specialty was negotiating transactions that satisfied all stakeholders.
It was while Tom was a broker that he decided to pursue his legal education. Balancing law school and a young family, Tom also managed to hold senior executive positions for multiple national franchise concepts throughout law school including a 100-unit fast casual restaurant chain; a franchised chain of over 400 supplemental education centers; and a 500-unit retail chain of franchised frozen dessert restaurants.
Passion:
Thanks to his background as an entrepreneur and a corporate franchise executive, Tom has a unique perspective as a franchise and business lawyer. When combined with his experience and acumen as a lawyer, he can vigorously defend his client’s legal rights without losing sight of their business goals. Tom understands franchising from the inside, giving his clients valuable counsel to help them map out and meet their business objectives.
More important and valuable, however, to any of Tom’s professional accomplishments is the time he gets to spend with his wife and their two children.

TOP 15 DIFFERENCES BETWEEN A FRANCHISE AND GOING OUT ON YOUR OWN

Posted on by Franchise Strategist

As you are new to the world of franchising, you might find it difficult to narrow down the franchise options. This is where a franchise consultant can help you.

TOP 15 DIFFERENCES BETWEEN A FRANCHISE AND GOING OUT ON YOUR OWN
By Tom Scarda, Certified Franchise Executive – Founder The Franchise Academy

To start a business, you have two options – a) Franchising or b) Starting a new business on your own.
Franchising refers to becoming a part of an established company by getting a license to use their company name, business model, marketing tools, etc., from the franchisor.

On the other hand, if you start a new business, you have to develop a product or service, business plans, marketing strategies, etc., by yourself.

There is a myth that franchising is more expensive than starting from scratch because of all the fees. However, in the long run, it may prove to be less expensive, especially if you fail.

Are you wondering – which one is the best? Are franchise consultants correct in saying – Franchising is better than starting a new business?

Read along; our list of top 15 differences between franchising and traditional business will answer all these and much more.
Sr. No Details Franchising Traditional Business
1 Business Idea In franchising, you leverage an already existing idea, no need to recreate the wheel. In a traditional business, you have to start from scratch and develop an idea by trial and error.

2 Workflow and processes Tried and tested workflows and operations are already established. You have to create all the processes and workflows on your own.

3 Support You will be given total assistance from the company/franchisor. There will be no external help in a traditional business until your business becomes successful.

4 Marketing In franchising, you will get better reach as the franchisor will provide you with effective marketing designs and collateral. You will know exactly who your customer is and where they live. You have to design several marketing campaigns and apply the most effective campaign. This will drain your bank account.

5 Required time With franchising, you can launch your business operations immediately in some cases. Initially, you will require at least 12 – 24 months or more to set up a business. You have to try and experiment with ideas and marketing campaigns while managing finances, logistics, and more.

6 Risk There is less risk in franchising because the business model is successfully running in multiple locations and you’re just plugging in. Traditional businesses come with higher risks as you are experimenting with new ideas that may or may not work upon launch.

7 Upgrades and development The company will provide you regular updates to scale your franchise. Moreover, the company will recommend new upgrades and innovations that have passed their R&D phase. You have to update your technology and workflows to suit the ever-changing consumer demand. No other company will push updates for your business.

8 Business plans, marketing guidance, training, etc. You will be guided by the company experts in all aspects of the business from marketing to recruitment, everything A to Z. In a traditional business model, you have to chalk out plans, discover new marketing campaigns while also training yourself. In simple words, you have to do everything by yourself.

9 Investment required As the business model is well-established, you get a clear picture of your initial and recurring expenses before you buy the franchise. Here, everything is based on trial and error; thus, you never get a clear estimate of your business expenses. As a result, you spend a much higher amount in setting up a new business.

10 Expert advice, feedback, and testimonials You will receive feedback, testimonials, and expert advice in a franchising model as there already exists a community of franchises. Getting expert opinions is a distant dream in a traditional business model. YouTube videos, blogs, and books will not help much as they are not directly related to your new business idea.
If you wish to get one-on-one advice from an expert, you have to pay out extra bucks.

11 Brand Identity Your franchisor has an established brand with recognized processes, trademarks, Intellectual property, and Google awareness. As a franchisee, you will enjoy all the benefits of an established brand. Starting a new business will take a few years to establish yourself as a brand with trademarks, confirmed processes, and IP and get on Google’s first page search.

12 Chances of success In franchising, you have proven business processes, marketing tools, and well-researched business upgrades. Also, if you face any challenges, you have a community of franchises to take help from.
All of these factors increase the chances of success by manifolds. You will face unforeseen challenges at every step of your business. Reinventing the business wheel with no external support makes it difficult to grow a business. Now you know why do 9 out of 10 startup businesses fail in the first couple of years.

13 Return on investment As you have a clear idea of expenses and a tried-and-tested business model in your hands, the return on investment for a franchisee is much higher. In a startup business, you will hardly make profits in the initial years. Also, if your business does well, you will have to re-invest a sum of your profits to further grow your business. As a result, your ROI remains negligible in the first few years of your business (and who knows whether the business will last long).

14 Customer base As a franchisee, you will benefit from the loyal customer base of the company. You don’t need to develop trust among customers; instead, you need to stand up to their loyalty to the company while developing trust among new customers. In a new business, you have to establish a customer base from scratch.

15 Easy access to finance Banks are more likely to approve loans as you are associated with a reputable franchise brand. New businesses come with high risks. As a result, banks will hesitate to bet on a startup business.
 
Which is better for you?

The Bottom Line – How to Choose a Franchise?

Now understand that franchising has several benefits over starting a new business, you must be wondering – How to choose a franchise?

To filter a franchise option, you should – 
1. Research – Enquire about the policies, credibility of the franchise, work culture, terms and conditions, etc.
2. Weigh your pocket – Research the expenses and choose a franchise that suits your budget.
3. Read the FDD – Before finalizing a franchise, you must carefully read the Financial Disclosure Document (FDD).

As you are new to the world of franchising, you might find it difficult to narrow down the franchise options. This is where a franchise consultant can help you.

A reputed franchise consultant, one who has owned and operated franchises and has a CFE at the end of his or her name, will handhold you through the entire franchising process, from finding a franchise to setting up a franchise and beyond. Or the result is that you find out that franchising is not the right fit for you. If that is the case, at least you made that decision to not move forward based on facts and not myths and misnomers.

If you wish to avoid any missteps when starting your franchising journey, you can chat with me . It’s always free of charge! Book a time today: www.GetWithTom.com
 
ABOUT THE AUTHOR:
Tom is a Certified Franchise Expert. He was the #1 franchisee of the year in one franchise concept and failed in another. The lessons learned from failure is what makes him an expert. Tom is the author of several books including the #1 Bestseller, Franchise Savvy: 6 Strategies that Pros Use to Pick Top Performing Franchises. He has helped more than 1500 people figure out if franchising is for them since 2005.

#FranchiseOpportunities #controlyourdestiny #changeyourlifetoday

Tips on How a Franchise Brand Can Become a Top-Performer in the Franchising Industry

Posted on by Franchise Strategist

How a Franchise Brand Can Become a Top-Performer

By Ed Teixeira.
VP Franchise Development FranchiseGrade.com , Author, Franchise Expert, MA Economics, Industry Partner of Stony Brook University Center of Entrepreneurial Finance, Pace University Lubin School of Business Advisory Board

For a franchise brand to become a top performer, franchisors must adhere to certain operating principles. One of the most important ones is to grow the number of franchise locations to promote the franchise brand. In the case of certain well-known franchise brands, system size alone doesn’t always convert to a top performing franchise brand.

Franchisors that want their franchise to be recognized as a top brand need to follow a set of building blocks that can serve as the foundation for a successful franchise system. Utilizing these building blocks will strengthen the franchise program, provide its franchisees the best opportunity for financial success and help establish the franchise brand as a top performer.

1. Equitable franchisee ROI must be a priority

The foundation of the franchise program operationally and financially must provide franchisees an opportunity for success that does not require extraordinary performance. If franchisees follow the franchise program and do not earn an ROI commensurate with their original investment, then the franchise may be flawed.

2. If the franchise program is flawed, then it must be fixed

Franchisors should adjust a franchise program that isn’t “working.” There is no reason why a royalty or advertising fund contribution can’t be changed. If certain products or services aren’t successful, then find alternatives. Conduct franchisee surveys to measure franchisee satisfaction levels.

3. The franchisor must control the franchise sales process and adhere to its ideal franchisee profile

Establish a franchisee profile and if franchise candidates don’t fit this profile say no! If the franchisor utilizes brokers, the franchisor must maintain control over the franchise sales process.

4. Be transparent with prospective franchisees

Provide prospective franchisees full disclosure about the franchise opportunity and what’s needed to be successful. The franchisor sales staff should act as more consultant and less salesperson.

5. Franchisor leadership must be engaged in the franchise operation

Franchisor leadership should be accessible and involved in the franchise operation, so they are aware of franchise system performance. There shouldn’t be surprises when it comes to franchisee performance.

6. Franchisee input should be solicited for important operational and marketing strategies

Significant changes or alterations to franchise operations and marketing, should involve the franchisees. This can be done using the FAC, advertising committee or other representative body.

7. New products and services should be evaluated and measured by franchisees before introduction

The franchisor should test new products, services or equipment in representative franchisee locations before introducing them. This process leads to objective and credible results that will earn the franchisees buy-in.

8. Obtain financial results from franchisees on a regular basis

Use franchisee financial statements to identify individual and collective franchisee performance. A lack of important financial information prevents a franchisor from knowing which franchisees are profitable and which are not.

9. Uphold and protect the integrity and standards of the franchise program

It’s critical that the franchisor uphold the standards of the franchise. The franchisees that follow the program deserve it and the customers that use the product or services provided by the franchisees are entitled to consistency. Franchisors that don’t protect the brand are not respected by their franchisees.

10. Invest in franchisee training and support

Top notch franchisors have viable and effective training programs. Training and support don’t end with start-up franchisee training but should be a continuing activity. When franchisor staff identifies weaknesses in the execution of franchisee operational practices the Training Department should implement programs to address these problems.

To build a top- performing franchise program franchisors can use these 10 building blocks, which requires implementing policies, practices and procedures to improve franchisee performance and success.
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Learn more about the author and Franchise Grade:
Ed Teixeira. VP Franchise Development FranchiseGrade.com , Author, Franchise Expert, MA Economics, Industry Partner of Stony Brook University Center of Entrepreneurial Finance, Pace University Lubin School of Business Advisory Board

How Do You Write A Good Brand Story

Posted on by Franchise Strategist

How Do You Write A Good Brand Story
By Jon Allo  

Your brand story differentiates you from everyone else. Otherwise, you’re just one more solution for the same old problem that customers can choose from, and usually without a standout differentiator they’ll base their choice on price. Most of the time, you do not want customers to choose you based on price alone. You want them to choose you because you’re you.
Telling your unique story starts with these questions:

When, Why and How Did You Start?
The best way to show authenticity is to be able to tell your audience when, why and you started doing what it is that you do. If you can tell your story in a way that your audience relates to you, and even roots for your success – even better.

How Do You Want Customers to View You?
As you write your story, it’s important to convey your values and ideals in a no-nonsense way. While you may be frightened of turning off some people, you really don’t need to worry about that. Those people aren’t your audience. Your audience consists of the people who can relate to your story, share your values, and want to be part of it.

Where Do You See Your Business Down the Line?
This is where you’ll try to dream big, and let your audience know where you see your business in the future. It also gives you the opportunity to refine consumer expectations toward what you offer rather than what the competition offers.

How you answer these questions is important.
You’re going to have many opportunities to do so via every communication you have with your audience – be it your blog, social media or even through the types of products you offer.

With the answers to these questions you can start to form your story and weave it throughout everything you do.

Share through Story Telling
Using an honest, no-holds-barred communication style to tell your story, your customers’ stories, and the story of your products is a good start. Use case studies, interviews, and in-depth relatable blog posts to accomplish this.

Share through Doing Good
Get involved with your community to give back something that is noticeable. You don’t want to do this just to get noticed, but you do want to pick something that helps people understand who you are as a business owner and what your business stands for.

Share through Experiences
You and your audience likely share common experiences that should be discussed. The more ways you can relate to them, the more ways they’ll see your offerings as unique and different.

Share with the Truth
Don’t hype, and don’t “blow smoke”. Consumers are smart today. They want the black and white truth of the matter. If it takes 20 hours a week to do what you do, and you’re teaching them, tell them the truth. If you’ve had to stay up overnight to work around children’s schedules, say so.

Share Everywhere
Don’t just “tell” your story on your blog in the “about” section. Tell your story everyplace. Use infographics, memes, blog posts, guest blog posts, articles, testimonials, good deeds and every possible way to spread your story. Be your story by your actions.

Branding is important for small business owners as well as large ones. If you have a limited budget, smart branding is perhaps the most inexpensive business tool you can create. To learn more about how to make you and your business stand out, download my free checklist, Branding For Small Businesses at https://jonallo.com/branding

Article Source: https://EzineArticles.com/expert/Jon_Allo/1079948

How Are You Handling Your Covid Financial Anxiety?

Posted on by Franchise Strategist

It is not worth the mental energy and distress to put pressure on yourself for what is out of your hands. Unproductive thoughts will put you on a never-ending cycle of “I have to figure it out, I have to figure it out.” That kind of spiraling activity just runs down your batteries.

Combating financial anxiety during a pandemic

Courtesy of BRANDPOINT
Photo by Aarón Blanco Tejedor on Unsplash

(BPT) – In the face of a global pandemic, financial anxiety is an everyday reality. Concerns surrounding personal finances, businesses shutting down and market volatility have us navigating new waters, experiencing more acutely than ever before how our financial lives are intertwined with our mental health. Amanda Clayman, financial therapist and Prudential’s financial wellness advocate, works with people to better understand the emotional connection we have with money.

According to Clayman, financial stress, while it may be inevitable in these times, does not have to control our lives. Even in the midst of this crisis, we can practice good financial and mental health and grow in our ability to maintain calm.

How to ease your mind and overcome financial distress

Clayman offers the below tips on how to ease your mind and overcome your financial distress during the days of COVID-19.

  • Allow yourself to feel a sense of loss: These big market changes may throw a wrench in the vision you had for retirement or your 401K. This is a scary realization, and a sad one. It is natural to have an emotional response, so let those feelings come and acknowledge them as they do. By not bottling up those sensations you are better able to say goodbye to your former plans and move forward. Additionally, looking your feelings in the face and comparing them to the reality of the situation provides valuable perspective that is key in the healing process.
  • Embrace uncertainty as part of the plan: Concentrate on the here and now, and don’t think too far ahead. It is common to try to manage anxiety by making a plan, but that’s going to be challenging when the future feels so uncertain. Try telling yourself, “I’m going to make the best plan I can based on what I know now. Then I’m going to trust that I will figure out problems as they arise and ask for help when I need it.”
  • Let go of what you can’t control: It is not worth the mental energy and distress to put pressure on yourself for what is out of your hands. Unproductive thoughts will put you on a never-ending cycle of “I have to figure it out, I have to figure it out.” That kind of spiraling activity just runs down your batteries.
  • Be intentional, not impulsive: Anxiety floods your mind with fearful thoughts of worst-case scenarios, tricking you into believing immediate action is necessary to fix the problem. It may feel like you are making progress initially, but these are not emotionally grounded decisions and can lead to costly mistakes. What you need is space for perspective, to differentiate between internal feelings and external reality. Try stepping away from the computer or going for a walk before making big moves. Remind yourself that you are safe right here, right now.
  • Don’t be a hero: You don’t have to bear this weight alone. You may feel as if providing financial security is all up to you, especially if you’re a caretaker or your kids moved home to ride out the pandemic. But this is not an individual problem, it’s a collective one we can face together. So reach out — take care of each other and ask to be taken care of in return. In addition to sharing your feelings with family and friends, be in touch with creditors, landlords and service providers about your concerns. They may be able to offer a payment holiday, partial payment or interest-only payment.

Explore new types of self-care

One of the most important lessons in combating any anxiety is to remember that you will not feel this way forever. In the meantime, let’s use these moments to explore new forms of emotional and financial self-care. With thoughtful reflection, we can foster a relationship with money that promotes mental health in even the most challenging circumstances.

MATTO FRANCHISE
A Revolution is Brewing
LEARN MORE HERE:
 https://www.mattofranchise.com/